[OPE-L:5256] Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: one commodity models and illustrations

From: Steve Keen (s.keen@uws.edu.au)
Date: Sat Mar 24 2001 - 20:24:40 EST

I am quite ambivalent about Desai's work.

On one hand, he does, unlike almost all other Marxists, attempt to employ 
use-value actively in his logic. If you check his Marxian economics, you 
will see that he tries to use the concepts of use-value and exchange-value 
to derive the labor theory of value. The following is a excerpt from my 
Masters thesis on this issue:

"Meghnad Desai's *Marxian Economics* rates as
one of the first English-language Marxist works to employ a
use-value/exchange value methodology. At first glance, his method
here is identical to that of Marx. Discussing the source of
surplus value, he states that once the worker has sold his labour
power to the capitalist,

Quote: "The gap between exchange value of labour power
and its use-value now becomes important... The use-value of the
labour ... is the value added by the worker. This use-value of
labour is in excess of the exchange value of labour power. This
gap is surplus value, and the capitalist seeks to buy labour
because he expects to reap surplus value".(Footnote: **Desai*,
op. cit., p. 21.)

So on first appearances, he's completely consistent with how I read Marx.

However, in attempting to explain the second crucial element of the labor 
theory of value--that machinery (and commodity inputs in general) do not 
produce surplus-value--he puts forwards propositions which are not just 
inconsistent with mine (no surprise there!), but also inconsistent with 
virtually everything Marx wrote on exchange under capitalism. Specifically, 
he claims that the class position of the buyer and seller in an exchange 
determines the rate of exchange:

Quote: "Labour creates surplus value by virtue of the
fact that the unequal relation operating in the market for labour
creates a gap between its use-value and exchange value. Of the
three factors of production, machines and raw materials are
bought and sold by capitalists and hence there is no possibility
of surplus value being extracted... Labour is the one commodity
that is sold by the worker and bought by the
capitalist."(Footnote: Ibid, pp. 23-24.)

I haven't written a journal article pulling this apart, though the material 
does exist in my thesis. It is one way to use use-value and exchange-value 
to derive the labor theory of value, but it does so at the expense of one 
of Marx's guiding principles, that unequal exchange as an explanation of 
surplus is no explanation at all.

On the other hand again, I have to agree with Rakesh that Desai's sense of 
the dynamics of Marx's analysis was very good indeed, and the schema of 
reproduction which he drew up was superb.

At 09:42 AM 3/24/01 -0800, you wrote:
>I rather liked Meghnad Desai's analysis of simple reproduction in the 
>first part of his Marxian Economics Book (as I now remember it). I read 
>his interpretation as follows: even assuming away the disturbances from 
>the continuous revolution in values in terms of its effect on stocks of 
>fixed capital, there are so still so many points of possible disturbance 
>on the both the value and the technical side in simple and expanded 
>reproduction that it is inconceivable that capitalist development could 
>ever take the form of equilibrium growth.
>This of course is also the thrust of Grossman's interpretation of the 
>schema in his dynamics book.  There was some debate between Andrew K and 
>Paul Z about whether the schema were meant to prove the possibility of 
>expanded reproduction without a permanent consumption deficit. It seems to 
>me that Marx himself was trying to demonstrate in his schema is that 
>capitalist development at any point cannot reasonably be expected to take 
>place in equilibrium.
>Yours, Rakesh

Dr. Steve Keen
Senior Lecturer
Economics & Finance
Campbelltown, Building 11 Room 30,
School of Economics and Finance
s.keen@uws.edu.au 61 2 4620-3016 Fax 61 2 4626-6683
Home 02 9558-8018 Mobile 0409 716 088
Home Page: http://bus.uws.edu.au/steve-keen/

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